DAOs: web3-native organizations collectively owned and managed by their members.

DAOs are the core unit behind a lot of web3 projects, sharing their mission with the public and allowing anyone to jump in and participate. But to understand them, we should first go over the three core characteristics of a DAO:


Decentralized: They have no clear hierarchy, anyone can obtain a leadership position by participating actively and sharing interesting proposals.

Autonomous: They rely on code and automation to execute their core mission. Minimizing human bias as much as possible.

Organizations: They execute on a clear mission, every DAO has a single need they aim to solve. The simpler, the better (e.g. We want to buy an NBA team, We want to reduce carbon emissions on the Ethereum Blockchain).

Sure, this is the ideal version of a DAO; but in practice, there’s really a lot more nuance to what they actually look like in web3. Having such a complex system of contributors lends itself to DAOs mixing and matching their own formula for these three components. Some of them have a core team leading the way; while others don’t rely as much on automation, opting for a more human-centric approach instead.

Some people prefer to call them “Tokenized Communities”, mostly because the term DAO can feel a bit misleading given how much grey area there is in between. But overall, the best way to describe DAOs as we know them currently is as a groupchat with a joint wallet, working towards a goal.


How are DAOs Different to Traditional orgs

There are books being written as we speak on the differences between DAOs and the companies you're used to. For the sake of brevity, and keeping in line with this article's topic, the main four you should be aware of are their Ease of Access, Hands-off Approach, Flexibility and Fluidity.

Wanna Learn More About This Topic?

Wanna jump straight to the fun part? In our next lesson you’ll be interacting with the Ethereum chain for the first time by sharing a little “hello world” piece with the community. Hop in here to see the lesson in advance.